Amongst other changes, from 1 January 2023, each BVI company (with exceptions for listed companies and companies already making financial filings in BVI) has to file an annual financial return with its registered agent within 9 months after the end of the year to which it relates. Furthermore, the names of current directors of a BVI company will, on payment of a fee, be available to registered users of the online VIRRGIN company search website.
Previously, the register containing the particulars of the directors of a BVI company was only required to be filed with the BVI Registry of Corporate Affairs, but was not available to be searched by the public (unless the company has voluntarily elected to file the register in the public record). By comparison, the names of a company’s directors have been available in the Cayman Islands since 1 October 2019.
The ability to check the names of directors of BVI companies is likely to prove beneficial for BVI litigants looking to establish a connection between an individual and a BVI company of which they are aware but about which they have no detailed information. However, the search would only reveal a list of the names of the current directors and no other information normally included in the full register of directors, including past directorship.
In some cases, the names of directors alone will be sufficient to establish a claim. In others, it may be necessary to establish the identity of members or beneficial owners of a company. In those cases, the connection shown by the names of directors may prove crucial in seeking disclosure orders against the registered agent compelling it to disclose the requisite information.
Norwich Pharmacal orders
Typically, disclosure is obtained by way of a “Norwich Pharmacal” order (derived from the English case of Norwich Pharmacal Co. v Customs and Excise Commissioners1).
Given the very large number of BVI companies administered by local registered agents, registered agents are typically the targets of disclosure orders as they would normally possess documents and records which may assist an intended claimant to ascertain the identity of the ultimate wrongdoers. In most cases, an intended claimant would wish to see the register of members, register of directors and due diligence information obtained when the company was set up.
The new requirement for an annual financial return to be filed with the registered agents may also allow claimants to seek financial information, perhaps to assist in the enforcement of judgments.
The threshold requirements which must be satisfied to obtain a Norwich Pharmacal order were summarised by the BVI High Court in Al-Rushaid Petroleum Investment Company and Another Ltd v TSJ Engineering Consulting Company Ltd2: a) there must be an apparent wrong carried out, or arguably carried out, by an ultimate wrongdoer; b) there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and c) the person against whom the order is sought must (i) be mixed up in so as to have facilitated the wrongdoing; and (ii) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued.
Wrong carried out
In general, the evidence should show that a wrong may arguably have been carried out by the ultimate wrongdoer. In UVW x XYZ3, a disclosure order was made to assist a judgment creditor to take enforcement steps where there had been a pattern of conduct by the judgment debtor to conceal assets.
Mixed up in the wrongdoing
In his 8 November 2010 judgment in JSC BTA Bank v Fidelity Corporate Services Limited and others4, Bannister J in the Commercial Division of the High Court found that the registered agents in that case were not sufficiently involved in, and had not participated in or facilitated, the wrongdoing complained of merely by incorporating and maintaining the relevant BVI companies. However, that case was the subject of appeal5. The Court of Appeal held that “by virtue of their role in providing registered agent services to the companies, a role which is voluntary, cannot on any view be considered as mere onlookers. The companies that they formed and maintained facilitated, although innocently, the commission of the fraud and as such were involved in the fraud perpetrated against the bank. This renders the respondent [registered agent] under a duty to disclose information through Norwich Pharmacal type proceedings which may assist the bank as the injured party in discovering the true wrongdoers.”
In UVW v XYZ6, Wallbank J observed that registered agents as well as other corporate service providers, depending upon the type of services provided, do more than trade with a company or its underlying owner. By facilitating the functioning of a company, they are involved in a company’s affairs, even if they do not know what the company is being used for. In the same case, Wallbank J noted that the requirement of necessity may be satisfied where it is just and convenient for the relief to be ordered in the interests of justice.
Freezing Orders
Whilst stand-alone disclosure orders will be sought pursuant to the jurisdiction in Norwich Pharmacal and other cases, disclosure of financial information may also be obtained as part of a freezing order (or Mareva injunction). In such orders, disclosure is required as a means of “policing” the injunction. It is now clear that Norwich Pharmacal orders and/or freezing orders may be obtained in aid of foreign as well as domestic proceedings (see K&S v Z&Z7). In the context of freezing orders, this was recently made clear by the Privy Council in its important decision in Broad Idea International Ltd v Convoy Collateral Ltd / Convoy Collateral Ltd v Cho Kwai Chee.8
[1] [1974] AC 133
[2] [2010] 4 JBVIC 2001
[3] [2016] ECSC J1027-1
[4] BVIHC (COM) 137 of 2010
[5] [2011] ECSC J0221-3
[6] [2016] ECSC J1027-1
[7] BVIHCM(COM) 16 of 2020
[8] [2021] UKPC 24
